Why industrial tenants are looking west along I-90

The Interstate 90 corridor has evolved into one of the Chicago region’s most dynamic industrial areas.

Lower occupancy costs, modern facilities, improved infrastructure and tenant migration from core infill locations have attracted a diverse mix of logistics and manufacturing users. Strong leasing momentum, tightening vacancy and measured new development are positioning the corridor as a long-term solution for companies seeking efficiency, scalability and value.

Once considered a secondary option to established industrial hubs such as O’Hare and Central DuPage, the I-90 corridor — generally stretching west from O’Hare along I-90 through Elgin and now extending to Huntley and Hampshire — is experiencing significant growth. Through the first half of the year, industrial leasing and sales totaled roughly 2 million square feet, surpassing all of 2025 and reflecting a broader shift in how companies evaluate industrial real estate.

Much of this migration is driven by two trends: the “flight to cost” and the “flight to quality.” Companies emerging from long-term leases signed before the pandemic and are facing sharply higher renewal rates and discovering that the I-90 corridor offers occupancy costs often 30% to 50% lower than core infill markets while providing newer, more efficient facilities.

Labor availability and employee retention remain top priorities, and the expansion of I-90, completed in 2017, has made the corridor more accessible to a larger workforce.

Communities like Elgin offer a deep, reliable labor pool and more affordable housing. Elgin recently was named the “safest and most affordable” city in the U.S. by GoBankingRates.

Additionally, the corridor’s logistics capabilities have strengthened considerably. Its eight-lane highway, improved interchanges and regional connectivity allow businesses to reach about 61% of the U.S. population within a two-day drive.

Demand has steadily reduced available inventory. Nearly all of the roughly 4 million square feet of speculative industrial space delivered during 2023 and 2024 has been leased or sold, leaving only about 400,000 square feet available. More than half of that absorption occurred within the past 10 months, highlighting accelerating leasing activity.

About 65% of recent leasing activity has come from companies relocating from O’Hare and Central DuPage, reinforcing the corridor’s growing role as an attractive alternative to traditional infill locations. Overall vacancy in the corridor has declined to 4.8%, while newer class A product is effectively operating closer to 3.5%. These dynamics have pushed rental rates to historic highs, though the corridor still offers relative value compared to more established industrial submarkets to the east.

Distribution and logistics companies remain the largest source of leasing activity, benefiting from the corridor’s transportation network. Manufacturing users — particularly owner-occupants — also have been increasingly active, attracted by modern facilities that support specialized operations.

Looking ahead, development is expected to continue at a measured pace. NorthPoint Development and Phelan Development have announced new speculative projects, while growing demand for build-to-suit facilities is prompting developers to tailor projects to specific operational needs.

Finally, as infill industrial properties near O’Hare are redeveloped into data centers and large-scale logistics facilities, many smaller and midsize users are being displaced. Many of them are relocating westward, further fueling demand along the I-90 corridor.

As these trends show, the I-90 corridor is no longer a peripheral option. It has become a proven industrial market where companies can lower occupancy costs, improve operational efficiency and position themselves for long-term growth.

• Steve Bass is executive vice president of industrial services for NAI Hiffman.